Amplifying a recent trend in aggressive enforcement actions against convertible debt investors, the SEC continues to bring charges against lenders in microcap companies for alleged violations of Section 15(a) of the Securities Exchange Act of 1934 (Exchange Act). In four recently filed actions, the SEC has adopted a novel – and aggressive – view of what it means to be an “unregistered dealer” under Section 15(a). One of the SEC’s actions directly targets a defendant that at least marketed itself as engaged in legitimate private investment in public equity (PIPE) raises. PIPE transactions certainly bear some similarities to the convertible debt transactions recently targeted by the SEC. That resemblance, combined with the SEC’s enforcement action, have rightly alarmed investors with the prospect of the SEC’s attempting to sweep all manner of PIPE transactions under the dealer registration requirements of Section 15(a). In a guest article, Baker McKenzie attorneys Perrie M. Weiner, Ben Turner and Kirby Hsu explain the dealer requirements under the Exchange Act; analyze the recent SEC enforcement actions involving unregistered dealer claims; discuss the difference between most PIPE transactions and the investment activity at issue in those cases; and conclude that those differences will make it difficult for the SEC to seriously target investors in PIPE transactions as “unregistered dealers.” For more on PIPEs, see “Registered Direct Offerings Enable Hedge Funds to Make Advantageously Structured Investments in Public Equity While Avoiding the Illiquidity and Other Downsides of PIPEs” (Jun. 25, 2010); and “Confidentiality, Standstill and Insider Trading Considerations Relevant to Hedge Funds Investing in PIPEs” (Nov. 11, 2009).